This report sets out ORR’s remuneration policy for directors and provides details on remuneration and staff that Parliament and other users see as key to accountability.

Remuneration report

People Committee

The People Committee maintains strategic oversight of the approach to remuneration, performance, reward, as well as other terms and conditions of all staff. It also has a specific role in reviewing the remuneration packages of ORR’s senior civil servants (SCS) including the Chief Executive. It comprises three non-executive members of the Board. For 2024-25 these were Anne Heal (Committee Chair), Catherine Waller and Justin McCracken.

The Committee’s role is set out in the Board’s rules of procedures. Our Civil Service pay strategy accords with parameters set by the Cabinet Office for the SCS following recommendations by the Senior Salaries Review Body.

Service contracts

The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit on the basis of fair and open competition. The recruitment principles published by the Civil Service Commission specify the circumstances when appointments may be made otherwise.

Unless otherwise stated below, the officials covered by this report hold appointments which are open-ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme.

Further information about the work of the Civil Service Commission can be found at
www.civilservicecommission.org.uk.

Remuneration policy

Remuneration of senior civil servants is set out in their contracts and is subject to annual review, taking into account guidance from Cabinet Office and the recommendations of the Senior Salaries Review Body. The notice period for all senior members of ORR does not exceed six months.

Each senior civil servant participated in performance management arrangements under which top performers have the opportunity to be awarded a performance-related payment, following the annual Cabinet Office pay guidance and the ‘Performance Management Arrangements for the Senior Civil Service’ (Cabinet Office, March 2024 edition). These performance payments are non-consolidated and non-pensionable.

The remuneration of the Chair and non-executive directors is set by the Secretary of State for Transport. Remuneration of non-executive Board members is by payment of salaries, and they have no entitlement to performance-related pay.

The arrangements for early termination of contracts of senior civil servants are made in accordance with the employment contract of the relevant individual subject to the provisions of the Civil Service Compensation Scheme. No early termination payments were made to senior civil servants in 2024-25 (2023-24: none). One voluntary exit was agreed with a senior civil servant in 2024-25 (2023-24: none).

Salary and pension entitlements (audited)

The following sections provide details of the remuneration and pension interests of the executive directors of ORR.

Single total figure of directors’ remuneration (audited)

The following table shows 2024-25 directors’ remuneration, with 2023-24 comparatives in brackets:

n.a. = not available.

Note 1: John Larkinson, Will Godfrey and Graham Richards have partnership pensions and were not members of a Civil Service pension scheme in the year.

Note 2: Vinita Hill left ORR on 31 December 2024. Her full year basic equivalent salary for 2024-25 was in the range £130,000 - £135,000.

Note 3: Richard Hines was appointed Acting Director, Railway Safety on 6 February 2024. He was then appointed Director, Railway Safety on 27 June 2024. His full year basic equivalent salary for 2023-24 was in the range £120,000 - £125,000.

Note 4: Ian Prosser left ORR on 26 June 2024. His full year basic equivalent salary for 2024-25 was in the range £140,000 - £145,000.

Salary includes: gross salary, overtime, reserved rights to London weighting or London allowances, recruitment and retention allowances, paid annual leave, and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by ORR and thus recorded in these accounts.

Bonus payments are based on performance levels attained and are made as part of the performance appraisal process. Bonuses reported in 2024-25 relate to performance in 2023-24 and comparative bonuses reported for 2023-24 relate to performance in 2022-23.

Benefits in kind comprise subsidised gym membership.

Pension benefits: John Larkinson has a partnership pension. In 2024-25 employer contributions totalling £31,659 were made to the partnership pension provider for him (2023-24: £31,444). Will Godfrey has a partnership pension. In 2024-25 employer contributions of £25,675 have been made for him (2023-24: £24,452). Graham Richards has a partnership pension. In 2024-25 employer contributions of £26,557 have been made for him (2023-24: £25,293).

Fair pay disclosures (audited)

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the lower quartile, median and upper quartile remuneration of the organisation’s workforce.

The banded remuneration of the highest-paid director in ORR in the financial year 2024-25 was £185,000 - £190,000 (2023-24: £180,000 - £185,000). This was 3.0 times (2023-24: 3.0 times) the median remuneration of the workforce, which was £61,039 (2023-24: £60,317).

In 2024-25, no employees (2023-24: none) received remuneration in excess of the highest-paid director. Remuneration ranged from £22,550 to £186,244 (2023-24: £20,670 to £182,707).

Total remuneration includes salary, non-consolidated performance-related pay and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

The following table shows the percentage change from the previous financial year for salaries and allowances and for performance pay and bonuses payable in respect of the highest paid director, based on the mid-point of the salary band.

The following table shows the average percentage change from the previous financial year for salaries and allowances and for performance pay and bonuses in respect of all employees taken as a whole, excluding the highest paid director.

The following table shows the ratio between the highest paid director’s total pay and benefits and the salary component of their total pay and benefits, and the lower quartile, median and upper quartile remuneration of our workforce.

The 25th and 50th percentile salary ratios have increased to 4.2 and 3.1 respectively (2023-24: 3.9 and 2.9) due to the average salary for staff in those quartiles decreasing slightly. There are no significant changes in the other ratios.

Total remuneration includes salary, non-consolidated performance-related pay and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

Pension entitlement for directors (audited)

Note 1: John Larkinson, Will Godfrey and Graham Richards were not members of a Civil Service pension scheme during the year.

Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. Before 1 April 2015, the only scheme was the Principal Civil Service Pension Scheme (PCSPS), which is divided into a few different sections – classic, premium, and classic plus provide benefits on a final salary basis, whilst nuvos provides benefits on a career average basis. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis. All newly appointed civil servants, and the majority of those already in service, joined the new scheme.

The PCSPS and alpha are unfunded statutory schemes. Employees and employers make contributions (employee contributions range between 4.6% and 8.05%, depending on salary). The balance of the cost of benefits in payment is met by monies voted by Parliament each year. Pensions in payment are increased annually in line with the Pensions Increase legislation. Instead of the defined benefit arrangements, employees may opt for a defined contribution pension with an employer contribution, the partnership pension account.

In alpha, pension builds up at a rate of 2.32% of pensionable earnings each year, and the total amount accrued is adjusted annually in line with a rate set by HM Treasury. Members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004. All members who switched to alpha from the PCSPS had their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha.

The accrued pensions shown in this report are the pension the member is entitled to receive when they reach normal pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over normal pension age. Normal pension age is 60 for members of classic, premium, and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. The pension figures in this report show pension earned in PCSPS or alpha – as appropriate. Where a member has benefits in both the PCSPS and alpha, the figures show the combined value of their benefits in the two schemes but note that the constituent parts of that pension may be payable from different ages.

When the Government introduced new public service pension schemes in 2015, there were transitional arrangements which treated existing scheme members differently based on their age. Older members of the PCSPS remained in that scheme, rather than moving to alpha. In 2018, the Court of Appeal found that the transitional arrangements in the public service pension schemes unlawfully discriminated against younger members (the ‘McCloud judgment’).

As a result, steps are being taken to remedy those 2015 reforms, making the pension scheme provisions fair to all members. The Public Services Pensions Remedy http://www.gov.uk/government/collections/how-the-public-service-pension-remedy-affects-your-pension is made up of two parts. The first part closed the PCSPS on 31 March 2022, with all active members becoming members of alpha from 1 April 2022. The second part removes the age discrimination for the remedy period, between 1 April 2015 and 31 March 2022, by moving the membership of eligible members during this period back into the PCSPS on 1 October 2023.

The accrued pension benefits, Cash Equivalent Transfer Value and single total figure of remuneration reported for any individual affected by the Public Service Pensions Remedy have been calculated based on their inclusion in the PCSPS for the period between 1 April 2015 and 31 March 2022, following the McCloud judgment. The Public Service Pensions Remedy applies to individuals that were members, or eligible to be members, of a public service pension scheme on 31 March 2012 and were members of a public service pension scheme between 1 April 2015 and 31 March 2022. The basis for the calculation reflects the legal position that impacted members have been rolled back into the PCSPS for the remedy period and that this will apply unless the member actively exercises their entitlement on retirement to decide instead to receive benefits calculated under the terms of the alpha scheme for the period from 1 April 2015 to 31 March 2022.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute but, where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally provided risk benefit cover (death in service and ill health retirement).

Further details about the Civil Service pension arrangements can be found at
www.civilservicepensionscheme.org.uk.

Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost.

CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Other pensions

Some employees are covered by the provisions of the Railway Pension Scheme (RPS), which is contributory and funded. The scheme is a defined benefit scheme with obligations met by the RPS trustees. Details of the RPS scheme statements and other financial information can be found in the annual report and accounts of The Railways Pension Trustee Company Limited.

The former rail regulators’ and a former Chair’s pensions are by analogy with the Principal Civil Service Pension Scheme. During 2024-25 there were no active members (2023-24: no active members). The accruing cost of providing for the members’ future benefits, which is based on actuarial advice, is charged to the Statement of Comprehensive Net Expenditure. A provision for the expected future liabilities for the former rail regulators’ and former Chair’s pension scheme is disclosed as a liability on the Statement of Financial Position.

Payments to past directors and compensation for loss of office (audited)

No compensation payments were made to past directors on early retirement or for loss of office (2023-24: none).

Fees of non-executive Board members and independent members of the Audit and Risk Committee (audited)

The following table shows fees for NEDs and independent members of the Audit and Risk Committee for 2024-25 with comparatives for 2023-24 in brackets.

Note 1: Benefits in kind are solely in relation to home to office travel and related hotel accommodation.

Note 2: Independent member of the Audit and Risk Committee.

Non-executive directors and the independent member of the Audit and Risk Committee are entitled to receive reimbursement of expenses incurred in relation to their duties. ORR meets the cost of the tax due on these taxable benefits. The only benefits in kind for non-executive directors and independent committee members are travel arrangements.

Staff Report

Staff composition

The table below shows staff composition by whole-time equivalent persons at 31 March 2025. This includes both permanent and fixed term contracts. It excludes contingent labour.

Average number of persons employed (audited)

The average number of whole-time equivalent persons employed during the year was as follows:

The ‘Others’ category above relates to non-executive directors and agency staff.

Staff costs (audited)

All ORR staff and related costs are charged to administration budgets.

Consultancy and temporary staff expenditure

Our expenditure on consultancy in 2024-25 was £1.4m (2023-24: £2.0m). Consultants are brought in to work on projects where the work is temporary and we do not have the specific skillset required, where the requirements fall outside of our core business, or where an external independent perspective is required. Temporary staff are brought in to provide short-term cover for business-as-usual work, or additional resource at peak times. Our expenditure on temporary staff in 2024-25 was £0.9m (2023-24: £0.7m).

Sickness absence data

The average annual working days lost per employee through sickness in 2024-25 was 4.8 (2023-24: 2.8). This compares to the civil service average of 7.8 days in 2024-25 (8.3 in 2023-24).

Turnover

During 2024-25 staff turnover was 14.7% which is slightly higher than in 2023-24 (14.1%).

Civil Service People Survey

ORR participates in the Civil Service People Survey. The 2024 survey, in which we had a high response rate of 74%, showed an engagement level of 63% compared to the civil service average of 64%.

Exit packages (audited)

One voluntary exit package was agreed and accounted for during 2024-25, in accordance with the provisions of the Civil Service Compensation Scheme (CSCS), a statutory scheme made under the Superannuation Act 1972. This will be paid in 2025-26. No exit packages were agreed or paid in 2023-24.

Principal Civil Service Pension Scheme

The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme in which ORR is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out as at 31 March 2020. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation.

The scheme’s actuary reviews employer contributions every four years following a full scheme valuation. Contribution rates were revised for 1 April 2024 to 31 March 2027 to a flat rate of 28.97% for all salary bands. Employers’ contributions of £5,721,072 were payable to Civil Service pension schemes in 2024-25. In 2023-24 employers’ contributions were at 28.97% of pensionable earnings. Employers’ contributions were £5,421,866 in 2023-24. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £173,552 were paid to an appointed stakeholder pension provider (2023-24: £150,179). Employer contributions are age-related and range from 8.0% to 14.75% of pensionable earnings. Employers also match employee contributions up to 3% of pensionable earnings. In 2024-25 employer contributions of £5,310 0.05% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees (2023-24: £4,322, 0.5%).

Contributions of £17,513 were due to the partnership pension provider at 31 March 2025 (31 March 2024: £nil).

No members of staff retired early on ill-health grounds (2023-24: none). There were no additional accrued pension liabilities (2023-24: £nil).

Other pension schemes

The Railway Pension Scheme (RPS) is a funded multi-employer defined benefit scheme administered by Railway Pensions Trustee Company Limited. This is a defined benefit scheme which prepares its own scheme statements. Details of the RPS pension statements can be found in the annual report and accounts of the RPS. Employer contributions of £12,687 were paid to the trustees of the RPS in 2024-25 at a rate of 1.5 times the individual members’ contributions, on the basis of actuarial valuations (2023-24: £18,272, 1.5 times). ORR matches some of the BRASS2 contributions (an AVC scheme) made by the members. In 2024-25, matching contributions of £2,174 were made (2023-24: £2,608). We expect contributions to be at a similar level in 2025-26.

With regard to the accrued pension costs for a former Chair and past rail regulators, no notional contributions (as advised by the Government Actuary) have been charged to the statement of comprehensive net expenditure (2023-24: £nil). The liability at 31 March 2025 is estimated at £639,000 (31 March 2024: £639,000).

People policies applied for disabled persons

We are a ‘level 2: disability confident employer’ which encourages applications from people with disabilities, offers them a guaranteed interview if they meet the minimum requirements for the role, and adjustments through the recruitment process.

There is support for colleagues with disabilities when in employment, making workplace adjustments to their working environment and competition providing additional training and support, utilising resources through our occupational health provider.

Diversity and inclusion

We are committed to the principles of equality and diversity, both as an employer and as a safety and economic regulator. In accordance with the Equality Act 2010, ORR has published specific equality objectives and regularly publishes diversity data in our capacity as an employer. We:

• eliminate unlawful discrimination, harassment and victimisation;
• promote equality of opportunity between people who share a ‘protected characteristic’ (such as age, disability or race) and those who do not; and
• foster good relations between people who share a protected characteristic.

Additionally, since October 2024, employers are required to take reasonable steps to prevent sexual harassment of their employees and we have published a risk assessment to examine where colleagues may be vulnerable to harassment and how that harassment can be prevented.

Our diverse backgrounds, experience and talents are critical in securing our success as a regulator. We make every effort to ensure that our people practices reflect the true value of every individual, and that we continually foster a diverse, open and inclusive workplace.

We aim to ensure that nobody receives less favourable treatment particularly on the basis of age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, gender or sexual orientation.

Our new three-year strategy was published in May 2024. Since 2020 we have increased representation across our target characteristics of female, minority ethnic, disability and LGBTQ and other. We continue to operate a diversity and inclusion steering group and a colleague diversity network.

*ORR includes all office locations

This year we continued our participation in the UK Regulators Network scheme, next generation non-executive directors (NEDs) which aims to widen the talent pipeline and diversity of NEDs in the public sector. We have welcomed three colleagues from the network who will receive mentoring and observe committee meetings during a 12-month period.

Engagement with colleagues

We continue to engage with our staff representatives group (which includes representatives from trade unions as well as non-union employee representatives) on a regular basis to share information on the organisation and on all aspects concerning employment. The non-union representative position is currently vacant.

Health and wellbeing

We continue to be active in our health and wellbeing initiatives regularly promoting emotional and financial wellbeing resources.

We have a cohort of mental health first aiders, run drop-in sessions for ‘Brew Monday’ and ‘Time to Talk’ day, and we encourage employees to share how they look after their own wellbeing.

We offer employees occupational health support via Fusion, access to free flu vaccinations, an employee assistance programme, with free face-to-face counselling sessions and a dedicated management support line.

Health and safety at work

We fully recognise and accept our legal responsibility in relation to the health, safety and welfare of our employees and for all people using our premises. We comply with the Health & Safety at Work Act 1974 and all other relevant legislation as appropriate.

We are committed to the positive promotion of accident prevention and the elimination of incidents involving personal injury, illness or damage. We actively monitor and manage our employee absence, ensuring that employees receive the support and advice they need from occupational health and/or our employee assistance service, to remain in work or return to work. The Executive Committee reviews our absence data on a quarterly basis for trends and changes and discusses how we can improve wellbeing. We have trained internal display screen equipment assessors in our offices, who undertake workstation assessments, with employees receiving an annual reminder to complete an assessment.

Apprenticeships

We have 15 apprentices working across several different areas of the business, including some existing roles which we have been able to convert to apprenticeships to provide our colleagues with new challenges and qualifications.

Off-payroll engagements

Highly paid off-payroll worker engagements as at 31 March 2025, earning £245 per day or greater

Highly paid off-payroll workers engaged at any point during the year ended 31 March 2025, earning £245 per day or greater

Off-payroll engagements of Board members, and/or, senior officials with significant financial responsibility, between 1 April 2024 and 31 March 2025

Facility time publication requirements

The following disclosures are required under Statutory Instrument 328: The Trade Union (Facility Time Publication Requirements) Regulations 2017.

Relevant union officials

Percentage of time spent on facility time

Percentage of pay bill spent on facility time

Paid trade union activities

John Larkinson
Accounting Officer
8 July 2025